Case 2:14-cv-06009-ODW-AGR Document 153-1 Filed 06/28/16 Page 1 of 34 Page ID
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1 Neville L. Johnson (SBN 66329)
njohnson@jjllplaw.com
2 Douglas L. Johnson (SBN 209216)
djohnson@jjllplaw.com
3 Jordanna G. Thigpen (SBN 232642)
jthigpen@jjllplaw.com
4 JOHNSON & JOHNSON, LLP
439 North Canon Drive, Suite 200
5 Beverly Hills, California 90210
Telephone: (310) 975-1080
6
William Anderson, (Pro Hac Vice)
7 wanderson@cuneolaw.com
Charles J. LaDuca, (Pro Hac Vice)
8 charles@cuneolaw.com
Michael J. Flannery (SBN 196266)
9 mflannery@cuneolaw.com
CUNEO GILBERT & LADUCA, LLP
10 507 C Street, NE
Washington, DC 20002
11 Telephone: (202) 789-3960
12 Brian W. Warwick, (Pro Hac Vice)
bwarwick@varnellandwarwick.com
13 Janet R. Varnell, (Pro Hac Vice)
jvarnell@varnellandwarwick.com
14 VARNELL & WARWICK, P.A.
P.O. Box 1870
15 Lady Lake, FL 32158
Telephone: (352) 753-8600
16
Attorneys for Plaintiffs and the Proposed Class
17
UNITED STATES DISTRICT COURT
18
CENTRAL DISTRICT OF CALIFORNIA
19
WESTERN DIVISION
20 AMY FRIEDMAN, JUDI
MILLER, KRYSTAL HENRY21 MCARTHUR, and LISA
ROGERS on behalf of themselves
22 and all others similarly situated,
23
24

Plaintiffs,
v.

25

GUTHY-RENKER LLC and
26 WEN BY CHAZ DEAN, INC.,
27
28

Defendants.

Case No. 2:14-cv-06009-ODW-AGR
MEMORANDUM OF LAW IN
SUPPORT OF MOTION FOR
PRELIMINARY APPROVAL OF
CLASS ACTION SETTLEMENT
Judge: Hon. Otis D. Wright II
Motion Date: August 1, 2016
Time: 1:30 p.m.
Location: Courtroom 11

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1
2 I.
3 II.

TABLE OF CONTENTS
INTRODUCTION .......................................................................................... 1
PERTINENT PROCEDURAL HISTORY .................................................... 2

4 III.
5 IV.

SUMMARY OF THE SETTLEMENT ......................................................... 2

6 V.

THE SETTLEMENT CLASS SHOULD BE CERTIFIED ........................... 7

7

A.

STANDARD OF REVIEW ........................................................................... 5

The Requirements of Rule 23(a) are Satisfied ..................................... 8

8

1. Numerosity ...................................................................................... 8

9

2. Commonality ................................................................................... 8

10

3. Typicality ........................................................................................ 8

11

4. Adequacy ........................................................................................ 9

12

B.

The Requirements of Rule 23(b)(3) are Satisfied .............................. 10

13

1. Predominance ................................................................................. 10

14

2. Superiority ..................................................................................... 12

15 VI.

THE PROPOSED SETTLEMENT SATISFIES THE
REQUIREMENTS FOR PRELIMINARY APPROVAL ........................... 13

16

A.

The Settlement Negotiations Occurred at Arm’s-Length
and Were Assisted by an Experienced Mediator ............................... 13

B.

Class Counsel Engaged in Sufficient Discovery to Make
an Informed Judgment Concerning the Merits of Their
Claims ................................................................................................ 14

20

C.

The Proponents of the Settlement are Highly Experienced
Class Action Litigators ...................................................................... 15

21

D.

The Settlement is Within the Range of Possible Approval ............... 15

22

E

23

Additional Factors Weighing in Favor of Preliminary
Approval............................................................................................. 16

24

1. The Complexity, Expense, and Likely Duration of the
Litigation Favors Settlement ................................................... 17

25

2. The Risk of Maintaining Class Action Status through
Trial Favors Settlement ........................................................... 18

17
18
19

26

FORM AND METHOD OF CLASS NOTICE SHOULD
27 VII. THE
BE APPROVED ........................................................................................... 19
28
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1 VIII. THE PROPOSED CLAIMS PROCESS SHOULD BE
APPROVED ................................................................................................. 22
2
IX. INCENTIVE AWARDS TO NAMED PLAINTIFFS AND
3
ATTORNEYS’ FEES AND COSTS ........................................................... 24
4 X.

CONCLUSION ............................................................................................ 25

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
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27
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1

TABLE OF AUTHORITIES

2

CASES

3 Acosta v. Trans Union, LLC, 243 F.R.D. 377, (C.D. Cal. 2007) ............................ 6
4 Adams v. Inter-Con Sec. Sys., 2007 U.S. Dist. LEXIS 83147 (N.D.
5

Cal. Oct. 29, 2007) ........................................................................................... 14

6 Alaniz v. California Processing, Inc. 73 F.R.D. 296, (C.D. Cal. 1976) ................ 13
7 Amchem Products, Inc., et al. v. Windsor et al., 521 U.S. (1997) ........................ 18
8 Armstrong v. Davis, 275 F.3d 849, (9th Cir. 2001) ................................................. 8
9 Blackie v. Barrack, 524 F.2d 891, (9th Cir. 1975) ................................................ 12
10 Boggess v Hogan 410 F Supp 433, (N.D. Ill. 1975).............................................. 20
11 Briggs v. United States, No. C 07–05760 WHA, 2010 WL 1759457,
12

(N.D. Cal. Apr. 30, 2010) ................................................................................... 5

13 Bruno v. Quten Research Inst., LLC, No. SACV 11–00173 DOC (Ex),
14

2013 WL 990495, (C.D. Cal. Mar. 13, 2013) .................................................... 6

15 Class Plaintiffs v. Seattle, 955 F.2d 1268, (9th Cir. 1992).................................. 5, 6
16 Clesceri v. Beach City Investigations & Protective Servs., 2011 WL
17

320998, (C.D. Cal. Jan. 27, 2011) .............................................................. 14, 15

18 Clothesrigger, Inc. v. G.T.E. Corp., 191 Cal. App. 3d 605, (1987) ..................... 11
19 Diamond Multimedia Systems, Inc. v. Superior Court 19 Cal. 4th 1036,
20

(1999)................................................................................................................ 11

21 Eisen v. Carlisle & Jacqueline, 417 U.S. 156, (1974) .......................................... 20
22 Ellis v. Naval Air Rework Facility, 87 F.R.D. 15, (N.D. Cal. 1980) ..................... 13
23 Ellis v. Naval Air Rework Facility, 661 F.2d 939 (9th Cir. 1981) ........................ 13
24 Flinn v. FMC Corp., 528 F.2d 1169, (4th Cir. 1975) ........................................... 16
25 Hanlon v. Chrysler Corp., 150 F.3d 1011, (9th Cir. 1998) ............................ passim
26 In re Continental Ill. Sec. Litig., 962 F.2d 566, (7th Cir. 1992)............................ 24
27 In re Heritage Bond Litig., 2005 WL 1594403 (C.D. Cal. June 10,
28

2005) ........................................................................................................... 13, 18
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1 In re Immune Response Secs. Litig., 497 F. Supp. 2d 1166, (S.D. Cal.
2

2007) ................................................................................................................. 14

3 In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, (9th Cir. 2000) ........................... 6
4 In re Oil Spill by Oil Rig Deepwater Horizon, 295 F.R.D. 112, (E.D.
5

La. 2013) ........................................................................................................... 20

6 In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, (9th Cir.
7

2015) ................................................................................................................... 5

8 In re Oracle Sec. Litig., No. 90-0931, 1994 U.S. Dist. LEXIS 21593,
9

1994 WL 502054, (N.D. Cal. June 18, 1994) .................................................. 24

10 In re Pacific Enterprises Securities Litigation, 47 F.3d 373, (9th Cir.
11

1995) ........................................................................................................... 13, 15

12 Kakani v. Oracle Corp., No. C 06-06493 WHA, 2007 WL 1793774,
13

(N.D. Cal. June 19, 2007) ................................................................................... 7

14 Larsen v. Trader Joe's Co., 2014 WL 3404531,(N.D. Cal. July 11,
15

2014) ................................................................................................................. 13

16 Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, (9th Cir. 1978)................. 9
17 Linney v. Cellular Alaska P’ship, 151 F.3d 1234, (9th Cir. 1998) ................. 14, 15
18 Mandujano v. Basic Vegetable Prod., Inc., 541 F.2d 832, (9th Cir.
19

1976) ................................................................................................................. 19

20 Martin v. Reid, 818 F.3d 302, (7th Cir. 2016) ....................................................... 23
21 Mills v. Elec. Auto-Lite Co., 396 U.S. 375, (1997) ............................................... 24
22 Misra v. Decision One Mortgage Co., No. SA CV 07-0994 DOC
23

(RCx), 2009 WL 4581276, (C.D. Cal. Apr. 13, 2009) ....................................... 7

24 Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) ................. 19
25 Nat'l Rural Telcoms. Coop. v. Directv, Inc., 2003 U.S. Dist. LEXIS
26

25375,(C.D. Cal. 2004) .............................................................................. 13, 15

27 Norwest Mortgage, Inc. v. Superior Court, 72 Cal. App. 4th 214,
28

(1999)................................................................................................................ 11
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1 Officers for Justice v. Civil Serv. Comm’n of City & Cnty. of San
2

Francisco, 688 F.2d 615, (9th Cir. 1982) ....................................... 14, 16, 17, 19

3 Parra v. Bashas’s Inc., 2008 U. S. App. LEXIS 15985, (9th Cir. July
4

29, 2008) ............................................................................................................. 8

5 Rodriguez v. West Publishing Corp., 563 F.3d 948, (9th Cir. 2009) .................... 13
6 San Francisco NAACP v. San Francisco Unified Sch. Dist., 59 F.
7

Supp. 2d 1021, (N.D. Cal. 1999) ...................................................................... 19

8 Smith v. Tower Loan of Miss., Inc., 216 F.R.D. 338, (S.D. Miss. 2003) .............. 24
9 Spann v. J.C. Penney Corporation, 314 F.R.D. 312, (C.D. Cal., 2016) ............... 20
10 Staton v. Boeing Co., 327 F.3d 938, (9th Cir. 2003) ......................................... 6, 25
11 Trujillo v. City of Ontario, No. ED cv-04-1015 VAP (C.D. Cal., Apr.
12

14, 2005) ........................................................................................................... 12

13 Van Bronkhorst v. Safeco Corp., 529 F.2d 943, (9th Cir. 1976) ............................. 5
14 Washington Mut. Bank v. Superior Court, 24 Cal. 4th 906, (2001) ....................... 10
15 Wershba v. Apple Computer, 91 Cal. App. 4th 224, (2001) ................................. 11
16 West v. Circle K Stores, Inc., No. CIV. S-04-0438 WBS GGH, 2006
17

WL 1652598, (E.D. Cal. June 13, 2006) ............................................................ 7

18 Williams v. Vukovich, 720 F.2d 909, (6th Cir. 1983) .............................................. 6
19

STATUTES

20 Class Action Fairness Act, 28 U.S.C. § 1715(b) ................................................... 26
21

OTHER AUTHORITIES

22 5 JAMES WM. MOORE, MOORE’S FEDERAL PRACTICE §
23

23.83(1), at 23-336.2 to 23-339 (3d ed. 2002) ................................................. 12

24 A. CONTE & H.B. NEWBERG, NEWBERG ON CLASS ACTIONS
25

§ 11:25 (4th ed. 2002) ...................................................................................... 13

26 MANUAL FOR COMPLEX LITIGATION (FOURTH) § 21.632, at
27

320-21 (4th ed. 2004) ................................................................................. 12, 13

28 MANUAL FOR COMPLEX LITIGATION (THIRD) § 30.41 (3rd ed.
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1

1995) ................................................................................................................. 13

2 Manual for Complex Litigation, § 21.312 (4th ed. 2004) ...................................... 25
3

RULES

4 Fed. R. Civ. P. 23 ............................................................................................ passim
5 Local Civil Rule 7-3 ................................................................................................ 7
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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1 I.

INTRODUCTION

2

Plaintiffs1 submit this memorandum in support of the Plaintiffs’ Motion for

3 Preliminary Approval of Class Action Settlement.2

Under the terms of the

4 Settlement Agreement and Release of Claims (“Agreement,” filed concurrently
5 herewith) between Plaintiffs Friedman, Miller, Henry-McArthur and Rogers
6 (collectively, “Plaintiffs”) and Defendants Guthy-Renker LLC (“Guthy-Renker”)
7 and WEN by Chaz Dean, Inc. (“WEN”) (collectively Guthy-Renker and WEN
8 shall be referred to as “Defendants”), Defendants have agreed to provide valuable
9 and substantial benefits to Settlement Class Members to resolve this Lawsuit. The
10 Agreement contains all of the material terms of the Settlement, including the
11 manner and form of notice to be provided to the Settlement Class, the conditions or
12 contingencies pertaining to the settlement’s final approval, and other necessary and
13 proper terms under Fed. R. Civ. P. 23 (“Rule 23”). The Settlement meets the
14 criteria for preliminary approval, and is well within the range of what might be
15 approved as fair, reasonable, and adequate. As such, Plaintiffs respectfully move
16 this Court to enter the Proposed Preliminary Approval Order, attached as Exhibit A
17 to the Joint Declaration of Interim Lead Counsel in Support of Preliminary
18
19
20
21
22
23
24
25
26
27
28

1

Pursuant to Local Civil Rule 7-3, Plaintiffs’ counsel met and conferred with
counsel for Guthy-Renker LLC, Dina Cox, and counsel for WEN by Chaz Dean,
Inc., Barry Schirm, concerning the instant Motion, which relief requires the Court
to weigh the various factors relating to approval of a class action settlement and
can only be done on noticed motion. On June 28, 2016, both counsel for
Defendants confirmed that their clients do not oppose the relief sought by this
motion based upon the Parties’ Settlement Agreement. Defendants note that this
memorandum reflects only the views of Plaintiffs and, but for the Parties’
Settlement Agreement, Defendants dispute Plaintiffs’ allegations of liability,
causation and damages, and they further contest class certification and reserve the
right to contest certification should the settlement not be finally approved or should
the Effective Date otherwise not take place. Defendants deny that they did
anything wrong, and liability is disputed in this matter for the primary reason that
WEN Hair Care products have not been proven to cause hair loss to consumers,
nor has it been legally determined that advertising of the Products was false or
misleading. The makers of WEN stand behind the quality, safety, and formulation
of the Products, all of which meet or exceed all safety and quality standards set by
the
cosmetics industry.
2
Capitalized terms not otherwise defined herein shall have the same meanings as
ascribed to them in the Settlement Agreement and Release of Claims.
1
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1 Approval (“Jt. Decl.” or “Joint Declaration”), preliminarily approving the proposed
2 settlement, conditionally certifying for settlement purposes only a Settlement Class
3 (described below), and providing for notice to members of the Settlement Class.
4 II.

PERTINENT PROCEDURAL HISTORY

5

This Lawsuit was initiated against Guthy-Renker on July 31, 2014.

6 Following the filing of an amended complaint, a motion to dismiss and compel
7 arbitration was filed on December 10, 2014. On February 27, 2015, this Court,
8 granted in part and denied in part the motion to dismiss and compel arbitration.
9 Shortly thereafter an intensive period of discovery began.

Depositions were

10 conducted of Plaintiffs Friedman and Miller in Florida and Maryland, respectively.
11 Additionally, Plaintiffs conducted depositions of Guthy-Renker employees on a
12 range of topics in North Carolina and California. Plaintiffs served more than 75
13 formal requests for production of documents, over 100 requests for admission and
14 18 interrogatories. Two motions to compel were litigated arising out of Plaintiffs’
15 discovery requests. On June 19, 2015, in midst of the discovery process, Plaintiffs
16 filed a second amended complaint naming WEN by Chaz Dean, Inc. as a
17 Defendant. Following the filing of WEN by Chaz Dean, Inc.’s answer to that
18 complaint, Plaintiffs served discovery on WEN by Chaz Dean, Inc. as well.
19

On September 24, 2015, this Court issued a stay of the litigation in order to

20 facilitate negotiation of a potential settlement.

The Parties attended four

21 mediations (January 29, 2016; February 29, 2016; March 1, 2016; and March 31,
22 2016), which were conducted at JAMS in Los Angeles before the Hon. Peter D.
23 Lichtman (Ret.).

At the conclusion of the March 31, 2016 mediation, Judge

24 Lichtman made a mediator’s proposal that all Parties accepted on April 29, 2016.
25 Since that time, the Parties held a two-day in-person meeting in Los Angeles on
26 May 9-10, 2016, served and responded to a variety of confirmatory discovery, and
27 worked diligently to reduce the Settlement Agreement to writing.
28 III.

SUMMARY OF THE SETTLEMENT
2
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1

The proposed Settlement contains the following material terms:

2

Settlement Class

3

The Settlement Class is defined as:

4

All purchasers or users of WEN Hair Care Products in the United

5

States or its territories between November 1, 2007 and August 1,

6

2016, excluding (a) any such person who purchased for resale and not

7

for personal or household use, (b) any such person who signed a

8

release of any Defendant in exchange for consideration, (c) any

9

officers, directors or employees, or immediate family members of the

10

officers, directors or employees, of any Defendant or any entity in

11

which a Defendant has a controlling interest, (d) any legal counsel or

12

employee of legal counsel for any Defendant, and (e) the presiding

13

Judge in the Lawsuit, as well as the Judge’s staff and their immediate

14

family members.

15
16

Settlement Consideration
The settlement consideration consists of:

17 Settlement Fund
18

Defendants agree to provide consideration of $26,250,000 (the “Fund”)This

19 Fund shall be used to, inter alia, pay for notice and claims administration by a
20 professional claims administration provider (the “Settlement Administrator”), to
21 pay Class Member claims, to provide Incentive Awards to the Named Plaintiffs, to
22 compensate the Special Master, and to compensate Class Counsel. None of these
23 funds shall revert to Defendants under any circumstances. To the extent residual
24 funds exist at the conclusion of the claim period, those funds will revert to cy pres,
25 as described in Section 6 of the Settlement Agreement.
26 Tier 1 Class-Wide Flat Rate Claims
27

Any member of the Settlement Class who purchased WEN Hair Care

28 Products, and does not timely request to opt-out of the Settlement Class, shall be
3
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1 entitled to submit a claim against the Fund for a one-time flat payment of $25 per
2 person as compensation for claims of misrepresentation regarding the qualities and
3 attributes of WEN Hair Care Products, or undocumented claims of bodily injury,
4 including but not limited to hair loss, hair damage, scalp pain or irritation, after
5 using WEN Hair Care Products. Five Million Dollars ($5,000,000) of the Fund
6 shall be set aside to pay Class Members making Tier 1 claims.
7 Tier 2 Documented Adverse Reaction Claims
8

Any member of the Settlement Class who alleges to have suffered bodily

9 injury, including but not limited to hair loss, hair damage, scalp pain or irritation,
10 as a result of using WEN Hair Care Products, and does not timely request to opt11 out from the Settlement Class, may make a claim against the Fund for
12 reimbursement of amounts spent to redress such alleged injuries, as well as an
13 injury award designed to compensate the Class Member for any alleged injuries
14 sustained, up to a maximum of $20,000 per Class Member, as set forth below. To
15 make a claim under Tier 2, the Class Member must submit a valid Tier 2 Claim
16 Form and supporting documentation, as set required by the Settlement Agreement.
17 Adverse Event Warning
18

Defendants agree that all labels for WEN Cleansing Conditioner created

19 after the Effective Date shall bear a common sense caution materially consistent
20 with the following:

“If you experience any adverse reaction after using this

21 product, immediately cease use and consult a physician.”
22 Release
23

In exchange for the valuable consideration provided by this Settlement, the

24 Parties have agreed to the following release: “any and all claims arising out of or in
25 any manner related to the subject matter of the Lawsuit, including, but not limited
26 to, the sale, marketing, advertising, distribution, design, formulation, manufacture,
27 purchase, or use of WEN Hair Care Products by any Settlement Class Member,
28 regardless of whether any such claim is known or unknown, asserted or as yet
4
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1 unasserted. This Release of Claims shall not affect the ability of any governmental
2 entity to conduct an investigation or assert a claim on its own behalf, but the
3 Release of Claims shall continue to have preclusive effect as to any and all relief
4 for or on behalf of any Settlement Class Member who has not opted-out of the
5 Settlement.”
6 Incentive Awards and Attorney’s Fees
7

Subject to approval by the Court, Named Plaintiffs Amy Friedman and Judi

8 Miller, who were subject to extensive discovery, including invasive review of
9 medical records and deposition, shall receive Incentive Awards of $25,000 each for
10 their substantial contribution in the prosecution of this Lawsuit for the benefit of
11 the Class. Named Plaintiff Krystal Henry-McArthur shall receive an Incentive
12 Award of $5,000 for her efforts in prosecuting the action for the benefit of the
13 Class. And Named Plaintiff Lisa Rogers shall receive an Incentive Award of
14 $2,500 for her efforts in prosecuting the Lawsuit on behalf of the Class.
15

Subject to approval by the Court, in light of the substantial work,

16 considerable expenses expended, and risks associated with prosecuting this
17 Lawsuit on behalf of the Class, Defendants agree not to oppose an application by
18 Class Counsel for up to $6,500,000 to cover all costs and fees incurred in
19 prosecuting this action on behalf of the Class. This request equates to less than
20 25% of the Fund. See, e.g., In re Online DVD-Rental Antitrust Litig., 779 F.3d
21 934, 949 (9th Cir. 2015) (recognizing 25% benchmark award in class actions and
22 upholding award of 25% of $27,250,000 common fund).
23 IV.

STANDARD OF REVIEW

24

Federal Rule of Civil Procedure 23(e) requires judicial approval for any

25 settlement agreement that will bind absent class members. See Fed. R. Civ. P.
26 23(e); see also Briggs v. United States, No. C 07–05760 WHA, 2010 WL 1759457,
27 at *3 (N.D. Cal. Apr. 30, 2010). And it is well-settled in the Ninth Circuit that
28 settlements are favored, particularly in class actions and other complex cases
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1 where substantial resources can be conserved by avoiding the time, cost, and rigor
2 of prolonged litigation. Class Plaintiffs v. Seattle, 955 F.2d 1268, 1276 (9th Cir.
3 1992); Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir. 1976). These
4 economic gains multiply in pre-certification settlements since class certification
5 undeniably represents a significant risk for Plaintiffs. Acosta v. Trans Union, LLC,
6 243 F.R.D. 377, 392 (C.D. Cal. 2007).
7

A court must take three steps in considering approval of a proposed

8 settlement: (1) the court must preliminarily approve the proposed settlement; (2)
9 members of the class must be given notice of it; and, (3) a final hearing must be
10 held after which the court must decide whether the tentative settlement is fair,
11 reasonable, and adequate.

See MANUAL FOR COMPLEX LITIGATION

12 (FOURTH) § 21.632, at 320-21 (4th ed. 2004) (“MANUAL (FOURTH)”). The
13 decision to approve a proposed class-action settlement is within the sound
14 discretion of the district court judge “because he is exposed to the litigants, and
15 their strategies, positions, and proof.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d
16 454, 458 (9th Cir. 2000); see also Class Plaintiffs v. City of Seattle, 955 F.2d 1268,
17 1276 (9th Cir. 1992); accord Bruno v. Quten Research Inst., LLC, No. SACV 11–
18 00173 DOC (Ex), 2013 WL 990495, at *1 (C.D. Cal. Mar. 13, 2013).
19

The sole inquiry at the preliminary approval stage is “‘whether a proposed

20 settlement is fundamentally fair, adequate, and reasonable,’ recognizing that ‘[i]t is
21 the settlement taken as a whole, rather than the individual component parts, that
22 must be examined for overall fairness.’” Staton v. Boeing Co., 327 F.3d 938, 952
23 (9th Cir. 2003) (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir.
24 1998)). But the ultimate question of fairness, reasonableness, and adequacy is
25 answered at the final-approval stage, after notice of the settlement has been given
26 to class members and they have had an opportunity to comment on the settlement.
27 See 5 JAMES WM. MOORE, MOORE’S FEDERAL PRACTICE § 23.83(1), at
28 23-336.2 to 23-339 (3d ed. 2002). Preliminary approval is merely the prerequisite
6
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1 to providing notice to the class so that all class members are “afforded a full and
2 fair opportunity to consider the proposed [settlement] and develop a response.”
3 Williams v. Vukovich, 720 F.2d 909, 921 (6th Cir. 1983). See also Misra v.
4 Decision One Mortgage Co., No. SA CV 07-0994 DOC (RCx), 2009 WL
5 4581276, at *3, 9 (C.D. Cal. Apr. 13, 2009) (“To determine whether preliminary
6 approval is appropriate, the settlement need only be potentially fair, as the Court
7 will make a final determination of its adequacy at the hearing on Final Approval,
8 after such time as any party has had a chance to object and/or opt out.”) (Emphasis
9 in original; citation omitted).
10

Courts have consistently noted that the standard for preliminary approval is

11 less rigorous than the analysis at final approval.

Preliminary approval is

12 appropriate as long as the proposed settlement falls “within the range of possible
13 judicial approval.” A. CONTE & H.B. NEWBERG, NEWBERG ON CLASS ACTIONS §
14 11:25 (4th ed. 2002) (“NEWBERG”) (citing MANUAL

FOR

COMPLEX LITIGATION

15 (THIRD) § 30.41 (3rd ed. 1995) (“MANUAL (THIRD)”)); MANUAL (FOURTH) §
16 21.632, at 321. Courts employ a “threshold of plausibility” standard intended to
17 identify conspicuous defects. Kakani v. Oracle Corp., No. C 06-06493 WHA,
18 2007 WL 1793774, at *6 (N.D. Cal. June 19, 2007). Unless the Court’s initial
19 examination “disclose[s] grounds to doubt its fairness or other obvious
20 deficiencies,” the Court should order that notice of a formal fairness hearing be
21 given to settlement class members under Rule 23(e). West v. Circle K Stores, Inc.,
22 No. CIV. S-04-0438 WBS GGH, 2006 WL 1652598, at *11 (E.D. Cal. June 13,
23 2006) (citation omitted); MANUAL (FOURTH) § 21.632, at 321-22.
24 V.
25

THE SETTLEMENT CLASS SHOULD BE CERTIFIED
Certification of a Settlement Class is appropriate where the class meets the

26 requirements of Rule 23(a) (numerosity, commonality, typicality, and adequacy of
27 representation), and the requirements of Rule 23(b)(3). (common questions of law
28 or fact predominate, and the class action is superior to other available methods of
7
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1 adjudication). Hanlon, 150 F.3d at 1019. In this Lawsuit, the proposed Settlement
2 can and should be properly certified under Rule 23.
3
4
5

A. The Requirements of Rule 23(a) are Satisfied
1. Numerosity
With millions of members scattered around the country, the Settlement Class

6 is sufficiently numerous to satisfy Rule 23(a)(1). Hanlon, 150 F.3d at 1019.
7
8

2. Commonality
There are clearly questions of law and fact common to the Settlement Class

9 sufficient to satisfy Rule 23(a)(2). The Rule 23(a)(2) commonality threshold is
10 easily met where, as here, the same common nucleus of facts will prove each class
11 member’s claim. See Parra v. Bashas’s Inc., 2008 U. S. App. LEXIS 15985, *8
12 (9th Cir. July 29, 2008) (citing Hanlon, 150 F.3d at 1019) (under Rule 23(a)(2) not
13 all questions of fact and law need be common).
14

Common questions in this Lawsuit include: (1) whether Defendants’

15 advertising was false and misleading; (2) whether WEN Hair Care Products cause
16 hair loss, scalp irritation or other adverse reactions; (3) whether Plaintiffs and
17 Settlement Class Members suffered damages as a result of Defendants’ conduct;
18 (4) whether WEN Hair Care Products contain a design defect; (5) whether
19 Defendants had exclusive knowledge of, but failed to disclose, the existence of a
20 defect in WEN Hair Care Products; (6) whether Defendants’ conduct constituted a
21 breach of warranty; and, (7) whether, as a result of Defendants’ omissions and/or
22 misrepresentations of material facts, Plaintiffs and members of the Class have
23 suffered an ascertainable loss of monies and/or property and/or value.
24
25

3. Typicality
The Rule 23(a)(3) requirement of typicality is also clearly satisfied here.

26 Typicality is satisfied when the representative’s claims are reasonably co-extensive
27 with those of absent class members, when each class member’s claim arises from
28 the same course of events and each class member makes similar legal arguments to
8
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1 prove the defendant’s liability. Armstrong v. Davis, 275 F.3d 849, 868 (9th Cir.
2 2001); Hanlon, 150 F.3d at 1019. In this Lawsuit, the claims of the Named
3 Plaintiffs and the Settlement Class Members arise from the same alleged course of
4 events: (1) that Defendants made misrepresentations in their national, uniform
5 advertising concerning the sulfates and synthetic ingredients; and, (2) that WEN
6 Hair Care Products have the capacity to cause hair loss and scalp irritation.
7
8

4. Adequacy
The adequacy prong of Rule 23(a)(4) is satisfied where the attorney or

9 attorneys representing the class is qualified and competent, and the class
10 representatives have no interests antagonistic to those of the Settlement Class
11 Members. Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir.
12 1978) (two criteria for determining adequacy, the named representatives must
13 appear able to prosecute the lawsuit vigorously through competent counsel and
14 representatives must not have antagonistic interests with absent class members).
15

Here Class Counsel is well qualified and competent.

As set forth in

16 Plaintiffs’ Motion to Lift Stay and for Appointment of Interim Class Counsel
17 Pursuant to Federal Rule of Civil Procedure 23(g) [Dkt No. 139], and the
18 accompanying declarations of William Anderson, Neville Johnson and Brian
19 Warwick [Dkt Nos. 139-1, 139-2, and 139-3], Plaintiffs’ Counsel have substantial
20 class action experience, as well as the financial and human resources necessary to
21 prosecute this action through trial and any appeals. These are counsel who are
22 “prepared to try a case.” See Hanlon, 150 F.3d at 1021. This Court recognized as
23 much when it granted the Motion and appointed Cuneo Gilbert & LaDuca, LLP;
24 Johnson & Johnson LLP; and Varnell & Warwick, PA, as interim class counsel
25 [Dkt No. 146].
26

Additionally, the Named Plaintiffs are not subject to any unique defenses

27 that might render their interests antagonistic to those of the Settlement Class
28
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1 Members. Each Plaintiff used WEN Hair Care Products, is a Settlement Class
2 Member, and alleges common harm as the result of utilizing the products.
3

B. The Requirements of Rule 23(b)(3) are Satisfied

4

1. Predominance

5

a.

6

All Claims will be Governed by California Law

In this case, the California consumer laws will apply to a national class

7 eliminating any “structural difficulties” arising from applying the consumer
8 protection laws of the 50 states, a circumstance that could defeat a finding of
9 predominance. Hanlon, 150 F.3d at 1021.
10

Under the choice of law principles of the forum, California law will apply to

11 this Lawsuit3 unless (1) California law conflicts with the law of another state, (2)
12 the state whose law conflicts with California law has an interest in applying its
13 own law, and (3) the foreign state’s interest in applying its own law would be more
14 impaired than California’s interest if the law of such state were not applied.
15 Washington Mut. Bank v. Superior Court, 24 Cal. 4th 906, 919-20 (2001)
16 (“California law may be used on a class wide basis so long as its application is not
17 arbitrary or unfair with respect to nonresident class members”). Applying these
18 principles to class actions asserting violations of California consumer protection
19 laws, federal and state courts in California have held that a national class can be
20 certified applying California laws exterritorialy where the defendant’s conduct, as
21 here, has a significant nexus with California.
22

In this Lawsuit, in particular, Plaintiffs allege that there are several factors

23 establishing a close nexus between the claims of the entire class and the State of
24 California:


25

Defendants are headquartered in the Central District of California;

26
27
28

3

Although Guthy-Renker has a California forum selection clause in its terms and
conditions, not all retailers or potential defendants had such a requirement,
meaning that national class certification pursuant to California law could have
been contested.
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

1

All decisions concerning the ingredients and formulations of WEN Hair

2

Care Products during the class period were directed from the Central

3

District of California;


4
5

Defendants directed their national sales campaign from the Central
District of California; and,



6
7

Defendant Guthy-Renker’s Terms and Conditions have a forum
selection clause requiring that disputes be resolved in California.

8 Compare Clothesrigger, Inc. v. G.T.E. Corp., 191 Cal. App. 3d 605, 613 (1987)
9 (in class action against a long distance telephone carrier, the court found sufficient
10 contacts with California to justify application of California law to the claims of a
11 nationwide class where (1) defendant did business in California; (2) defendant’s
12 primary offices were located in California; (3) a significant number of class
13 members were located in California; and, (4) defendant’s agents who prepared the
14 advertising materials at issue were located in California); See also Wershba v.
15 Apple Computer, 91 Cal. App. 4th 224, 242 (2001) (affirming the certification of a
16 national class in an FAL action against California computer manufacturer,
17 reasoning that “there were significant contacts with California in this case to
18 satisfy constitutional concerns and support certification of a nationwide class…”).4
19 This Lawsuit is virtually indistinguishable from the foregoing cases in which
20 courts have certified national classes under California’s consumer protection laws.
21

b.

Common Questions of Fact and Law Predominate

A common nucleus of facts and potential legal remedies “dominate this

22

23 litigation.” See Hanlon, 150 F.3d at 1022. Plaintiffs would establish Defendants’
24
25

4

Norwest Mortgage, Inc. v. Superior Court, 72 Cal. App. 4th 214, 223-224 (1999)
national class may be certified when conduct violative of the UCL emanates
26 (a
from California); Diamond Multimedia Systems, Inc. v. Superior Court 19 Cal. 4th
1064 (1999) (“California also has a legitimate and compelling interest in
27 1036,
preserving a business climate free of fraud and deceptive practices and recognized
importance of extending state-created remedies to out-of-state parties harmed
28 the
by wrongful conduct occurring in California.”).
11
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1 liability by demonstrating facts sufficient for the trier of fact to conclude: (1)
2 Defendants made misrepresentations or omissions with a likelihood or tendency to
3 deceive or confuse the public; (2) those misrepresentations or omissions were
4 material; and, (3) WEN Hair Care Products were the proximate cause of physical
5 injury to Plaintiffs and the Class. In this Lawsuit, the proof required at trial will be
6 common to the entire Class, as Plaintiffs allege that the advertisements and
7 promotional materials at issue were uniform, generated by Defendants in
8 California, and distributed nationally. As to adverse reactions, common proof
9 would be required at trial to demonstrate the causes of hair loss and scalp irritation.
10

Plaintiffs would be prepared to demonstrate through expert testimony that

11 there is a quantifiable and scientifically sound method of determining the
12 difference in value between WEN Hair Care Products as advertised and WEN Hair
13 Care Products as they were actually provided. Put another way, Plaintiffs would
14 utilize hedonic regression and conjoint analysis to establish the price premium paid
15 for WEN Hair Care Products stemming from misrepresentations as to the
16 characteristics of the products. Further, Plaintiffs would utilize expert medical and
17 scientific testimony to establish that WEN Hair Care Products were the proximate
18 cause of hair loss and scalp irritation for Plaintiffs and the Class.
19

And while some individual proof might be relevant to determining

20 alternative measures of damages, i.e., the amount and severity of hair loss and
21 scalp irritation, that does not preclude class certification. The amount of damages
22 is invariably an individual question and does not defeat class action treatment.
23 Trujillo v. City of Ontario, No. ED cv-04-1015 VAP at 7 (C.D. Cal., Apr. 14,
24 2005) (quoting Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir. 1975)).
25

2. Superiority

26

A class action is a vastly superior means, and likely the only practical

27 means, of adjudicating the claims of millions of class members scattered all over
28 the country. Comparing the available mechanisms for dispute resolution, and
12
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1 where, as here, the individual claims are relatively small when compared to the
2 complexity of the litigation and resources necessary for establishing causation and
3 proof, the class action is clearly superior. See Hanlon, 150 F.3d at 1023.
4 VI.

THE PROPOSED SETTLEMENT SATISFIES THE

5

REQUIREMENTS FOR PRELIMINARY APPROVAL

6

A presumption of fairness for a proposed settlement arises where: (1) the

7 settlement was reached through arm’s-length negotiations; (2) investigation and
8 discovery are sufficient to allow counsel and the court to act intelligently; and, (3)
9 counsel is experienced in similar litigation. In re Heritage Bond Litig., 2005 U.S.
10 Dist. LEXIS 13555, 11-12 (C.D. Cal. June 10, 2005); Ellis v. Naval Air Rework
11 Facility, 87 F.R.D. 15, 18 (N.D. Cal. 1980), aff'd, 661 F.2d 939 (9th Cir. 1981).
12 Preliminary approval should be granted where a settlement has no obvious
13 deficiencies and falls within the range of possible approval. Alaniz v. California
14 Processing, Inc. 73 F.R.D. 296, 273 (C.D. Cal. 1976).
15
16
17

A.

The Settlement Negotiations Occurred at Arm’s-Length and
Were Assisted by an Experienced Mediator

Courts accord “considerable weight” to settlements that are the product of

18 hard-fought negotiations by experienced counsel. Ellis, 87 F.R.D. at 18; Larsen v.
19 Trader Joe's Co., 2014 WL 3404531, *5 (N.D. Cal. July 11, 2014). Settlements
20 that follow sufficient discovery and genuine arm’s-length negotiation are presumed
21 fair. Nat'l Rural Telcoms. Coop. v. Directv, Inc., 2003 U.S. Dist. LEXIS 25375,
22 *13 (C.D. Cal. 2004).

When a settlement is achieved through arm’s-length

23 negotiations between experienced counsel, the Court should be hesitant to
24 substitute its own judgment for that of counsel absent a showing of fraud, collusion
25 or other forms of bad faith because the “[p]arties represented by competent counsel
26 are better positioned than courts to produce a settlement that fairly reflects each
27 party’s expected outcome in litigation.” Rodriguez v. West Publishing Corp., 563
28 F.3d 948, 967 (9th Cir. 2009) (citing In re Pac. Enters. Sec. Litig., 47 F.3d 373,
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1 378 (9th Cir. 1995)).
2

As detailed above and in the accompanying Joint Declaration, the Settlement

3 is the product of hard-fought arm’s-length negotiations. The Parties were aided in
4 this process by a highly respected mediator—Hon. Peter D. Lichtman (Ret.)—who
5 assisted the negotiations during four separate mediations held at JAMS in Los
6 Angeles. Jt. Decl., ¶ 4. The process pursuant to which the proposed settlement
7 was achieved is a factor weighing in favor of preliminary approval. Adams v.
8 Inter-Con Sec. Sys., 2007 U.S. Dist. LEXIS 83147 (N.D. Cal. Oct. 29, 2007) (the
9 assistance of an experienced mediator in the settlement process confirms that the
10 settlement is non-collusive); see also In re Immune Response Secs. Litig., 497 F.
11 Supp. 2d 1166, 1171 (S.D. Cal. 2007) (fact that a settlement was reached through
12 negotiations with an experienced mediator is highly indicative of fairness).
13

B.

Class Counsel Engaged in Sufficient Discovery to Make an

14

Informed Judgment Concerning the Merits of Their Claims

15

The Court need not reach any ultimate conclusions on the contested issues of

16 fact and law underlying the merits of the dispute, for it is the uncertainty of
17 outcome in litigation and avoidance of wasteful and expensive litigation that
18 induce consensual settlements. Officers for Justice v. Civil Serv. Comm’n of City
19 and County of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982). Approval of a
20 class action settlement does not require that discovery be formal or exhaustive.
21 See Clesceri v. Beach City Investigations & Protective Servs., 2011 WL 320998, at
22 *9 (C.D. Cal. Jan. 27, 2011) (“In the context of class action settlements, formal
23 discovery is not a necessary ticket to the bargaining table where the parties have
24 sufficient information to make an informed decision about settlement.” (quoting
25 Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1239 (9th Cir. 1998))).
26

Class Counsel firmly believe that the claims in this action have merit and are

27 supported by ample evidence. Class Counsel has been actively engaged in this
28 litigation for approximately two years and thoroughly researched the contested
14
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1 issues prior to and during the Litigation. Jt. Decl., ¶ 2). As the Court is aware, the
2 Parties engaged in extensive discovery and discovery-related motion practice. Jt.
3 Decl., ¶ 3. Class Counsel reviewed thousands of pages of relevant documents
4 produced by Defendants and third parties and took depositions of Defendants’
5 employees and executives. Id. Plaintiffs Friedman and Miller were subject to
6 substantial discovery and were both deposed. Id. Class Counsel engaged multiple
7 experts knowledgeable about the subject matter of the Lawsuit to assist them in the
8 review and analysis of information obtained through discovery, as well as in
9 developing their theory of the case. Id. All of this helped solidify Class Counsel’s
10 belief in the merits of the claims. This factor too supports preliminary approval.
11 Nat'l Rural Telcoms. Coop., 2003 U.S. Dist. LEXIS 25375 at*13.
12

C.

13
14

The Proponents of the Settlement are Highly Experienced Class
Action Litigators

Parties represented by competent counsel are better positioned than courts to

15 produce a settlement that fairly reflects each party’s expected outcome in litigation.
16 In re Pacific Enterprises Securities Litigation, 47 F.3d 373, 378 (9th Cir. 1995).
17 The recommendations of plaintiffs’ counsel should be given a presumption of
18 reasonableness.

Clesceri, 2011 WL 320998, at *10 (“Courts give weight to

19 counsels’ opinions regarding the fairness of a settlement, when it is negotiated by
20 experienced counsel.”). As the docket in this case reflects, Class Counsel have
21 vigorously prosecuted this case from the beginning, and are willing, able, and
22 prepared to litigate this case through trial and beyond.

Class Counsel has

23 considerable experience in handling complex class actions in general, and
24 consumer class actions in particular. See Dkt Nos. 139, 139-1, 139-2, and 139-3.
25 This factor weighs in favor of granting preliminary approval.
26

D.

The Settlement is Within the Range of Possible Approval

27

This settlement is tailored towards resolving Class Members’ complaints

28 concerning advertising misrepresentations and omissions, as well as claims of
15
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1 bodily injury. The Settlement provides a simple and straightforward means by
2 which Class Members can receive flat-rate compensation for advertising claims
3 and for undocumented claims of bodily injury. To the extent that Class Members
4 claim bodily injury, including hair loss and scalp irritation, the Settlement provides
5 an innovative and technologically advanced means by which Class Members can
6 receive up to $20,000 each. The claim process for Tier 2 claims is efficient and
7 designed to reduce the burden on the Court. Finally, the adverse reaction warning
8 ensures that those who use WEN Hair Care Products are instructed to cease use of
9 the product and consult a physician if they experience an adverse reaction.
10

The Parties worked long and hard to come up with a settlement that provides

11 meaningful benefits to all Settlement Class Members, that is tailored to remedy the
12 specific issues raised by Plaintiffs’ allegations, and that is user-friendly and
13 accessible to Settlement Class Members. It is unlikely that a successful result at
14 trial would garner a significantly better result than that achieved by the proposed
15 Settlement. But even if it did, “[i]t is well-settled law that a cash settlement
16 amounting to only a fraction of the potential recovery will not per se render the
17 settlement inadequate or unfair.” Officers for Justice v. Civil Serv. Comm’n of City
18 & Cnty. of San Francisco, 688 F.2d 615, 628 (9th Cir. 1982) (citing Flinn v. FMC
19 Corp., 528 F.2d 1169, 1173-74 (4th Cir. 1975)). Given the uncertainties of class
20 certification and trial, the value of the Settlement plainly meets (and exceeds) the
21 adequacy standard and renders this factor supportive of the proposed Settlement.
22

E.

Additional Factors Weighing in Favor of Preliminary Approval

23

Although not required to be demonstrated at the preliminary approval stage,

24 the proposed settlement also satisfies many of the other criteria for final approval
25 as being fair, reasonable, and adequate.
26

Courts in the Ninth Circuit have examined some or all of the following

27 factors in making such a determination: (1) the strength of plaintiff's case; (2) the
28 risk, expense, complexity, and likely duration of further litigation; (3) the risk of
16
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1 maintaining class action status throughout the trial; (4) the amount offered in
2 settlement; (5) the extent of discovery completed and the stage of the proceedings;
3 (6) the experience and view of counsel; (7) the presence of a governmental
4 participant; and, (8) the reaction of the class members to the proposed settlement.
5 Hanlon, 150 F.3d at 1026.5 Factors (1), (4) (5), and (6) are largely discussed
6 above, and factor (8), the reaction of the class to the settlement, can only be
7 determined after notice has been accomplished.6

An analysis of factors (2) and

8 (3), further favors preliminary approval of the proposed Settlement.
9

1. The Complexity, Expense, and Likely Duration of the Litigation

10

Favors Settlement

11

Significantly, despite having a factually well-developed case, the Parties still

12 face significant uncertainty due to the novelty of the factual and legal issues
13 presented and the lack of binding authority on point. Defendants deny the factual
14 allegations in the operative complaint and any legal liability arising from those
15 claims. Plaintiffs and Defendants recognize the substantial time and expense that
16 would be required to take this case to trial and through appeal, and the
17 circumstances and attendant risks favor settlement. See Hanlon, 150 F. 3d at 1026.
18

While Plaintiffs largely prevailed on Guthy-Renker’s motion to dismiss and

19 compel arbitration, and the Parties were able to reach the proposed settlement
20 through meaningful discovery and mediation, the continued litigation of contested
21 issues would involve significant time and expense. Additional discovery would be
22 needed to prepare for class certification, trial, and beyond. See Jt. Decl. at ¶ 5.
23
24
25
26
27
28

5

The Ninth Circuit has stressed that this is not an exhaustive list of relevant
considerations, nor even necessarily the most significant factors. Officers For
Justice, 688 F.2d at 625. Moreover, the relative degree of importance to be
attached to any particular factor will depend upon and be dictated by the nature of
the claims advanced, the types of relief sought, and the unique facts and
circumstances presented by each individual case. Id. The issue is not whether the
settlement could be better, but whether it is fair, reasonable, and adequate and free
from
collusion. Hanlon, 150 F.3d at 1027.
6
Factor (7) does not appear to be pertinent, as no government agency is or was a
party to this action.
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1 Additional motions to compel discovery would be likely. Id. The parties would
2 require additional depositions and motion practice to brief and argue class
3 certification.

Id.

Multiple expert reports would be prepared and exchanged.

4 Summary judgment briefs would likely be exchanged and argued, and further time
5 and expense would be endured in preparation for and through the duration of any
6 trial and future appeal. And an MDL motion would be probable, if not certain. As
7 such, the proposed settlement offers a compromise that meaningfully addresses the
8 claims at issue in light of the substantial amount of time and expense that would be
9 involved with litigating the claims through trial and appeal. This factor weighs in
10 favor of granting preliminary approval.
11

2. The Risk of Maintaining Class Action Status through Trial

12

Favors Settlement

13

The risks associated with maintaining a class action through trial are a

14 relevant criterion in evaluating the reasonableness of a proposed class action
15 settlement. Amchem Products, Inc., et al. v. Windsor et al., 521 U.S.at 591 (1997)
16 ; see also In re Heritage Bond Litig., 2005 WL 1594403 (C.D. Cal. June 10, 2005).
17

Plaintiffs anticipate that Defendants would vigorously contest class

18 certification. Defendants engaged in sufficient class discovery (i.e., depositions
19 and document discovery of Named Plaintiffs), to make evident that Defendants
20 carefully considered various possible defenses against class certification. While
21 Plaintiffs believe the criteria of Rule 23 are satisfied here, Plaintiffs recognize the
22 risks inherent in obtaining, and maintaining, class certification in a nationwide
23 consumer class action applying California law.
24

It should be noted that the requirement of Rule 23 that the class action be

25 “manageable” need not be met in the context of certification of a settlement class.
26 Amchem, 521 U.S. at 591. If this action were to continue, Defendants would likely
27 contend that this case would present a host of case management problems.
28

Finally, even if Plaintiffs were successful in obtaining class certification,
18
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1 Defendants would likely pursue an interlocutory appeal pursuant to Rule 23(f).
2 The outcome of such an appeal would also be uncertain, and, at a minimum, would
3 delay and add complexity and additional risk and cost to the proceedings, delaying
4 or eliminating the possibility of meaningful recovery for Plaintiffs and the Class.
5 VII. THE FORM AND METHOD OF CLASS NOTICE SHOULD BE
6

APPROVED

7

A Rule 23(e) class notice is sufficient if it informs the class members of the

8 nature of the pending action, the general terms of the settlement, the options
9 available to class members (e.g. submitting a claim form, opting out, and/or
10 objecting), the time and place of the fairness hearing, and ways to obtain more
11 detailed information. Manual for Complex Litigation, § 21.312 (4th ed. 2004). The
12 distribution of class notice is sufficient if it is given in a form and manner that does
13 not systematically leave an identifiable group without notice.

San Francisco

14 NAACP v. San Francisco Unified Sch. Dist., 59 F. Supp. 2d 1021, 1027-1028
15 (N.D. Cal. 1999), quoting Officers for Justice, 688 F.2d at 624 (citing Mandujano
16 v. Basic Vegetable Prod., Inc., 541 F.2d 832, 835-836 (9th Cir. 1976)). Due
17 process requires only a procedure reasonably calculated to reach class members.
18 Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950).
19

More specifically, Rule 23(c)(2)(B) requires the notice directed to the class

20 to clearly, and in concise, plain, easily-understood language state: (a) the nature of
21 the action; (b) the definition of the class certified; (c) the class claims, issues, or
22 defense; (d) that a class member may enter an appearance through an attorney if he
23 or she desires; (e) that the court will exclude any member of the class upon request;
24 (f) the method and time to request exclusion; and, (g) that the judgment will be
25 binding on class members. Here, the Parties strictly adhered to these requirements.
26

To start, the Parties have developed a four-part Notice Plan which involves

27 direct notice, by email and US Mail, to approximately 6 million Settlement Class
28 members for whom Defendants possess contact information. Second, notice will
19
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1 be published in a manner comporting with due process in order to reach those
2 Class Members for whom no contact information is available. Third, a Settlement
3 Website will be created. Finally, the Settlement Administrator will provide notice
4 to governmental agencies pursuant to the Class Action Fairness Act, 28 U.S.C. §
5 1715(b). This multi-step approach is reasonable under the circumstances of this
6 case. Each form of Notice will be addressed in turn.
7

First, the majority of Class Members will receive notice by direct email in

8 the form of Exhibit B to the Joint Declaration. Unlike many consumer products,
9 the vast majority of Class Members purchase WEN Hair Care Products online,
10 either directly from Guthy-Renker or WEN by Chaz Dean or through one of the
11 online retailers such as QVC and Amazon. Because the majority of sales were
12 made online, email addresses are already the primary method for communicating
13 product information to these customers, such as receipts, promotions and delivery
14 information. The Parties are in the process of obtaining email addresses from their
15 online retailers. It is estimated that email notice will be issued to approximately 5
16 million class members. See, Spann v. J.C. Penney Corporation, 314 F.R.D. 312,
17 331 (C.D. Cal., 2016) (approving email and postcard notice plan); In re Oil Spill by
18 Oil Rig Deepwater Horizon, 295 F.R.D. 112, 151 (E.D. La. 2013) (approving
19 email and post card notice plan.). Accordingly, providing notice to the Class
20 through email is preferable and will cost only a fraction of the cost of regular mail.
21

Second, any Class Member who did not provide a valid email address will

22 be issued notice by postcard delivered by regular mail in the form of Exhibit C to
23 the Joint Declaration. Approximately 1 million class members will receive notice
24 by regular mail. The postcard notice will be in summary form and will provide
25 information to allow the class member to obtain more detailed information. Eisen
26 v. Carlisle & Jacqueline, 417 U.S. 156, 173 (1974) (individual mailed notice is the
27 best practicable notice with respect to those class members whose names and
28 addresses are easily identifiable); Boggess v Hogan 410 F Supp 433, 442 (N.D. Ill.
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1 1975) (Rule 23(e) is not violated where notice of settlement is individually mailed
2 but never published).
3

The third component of the Notice Plan involves notice by publication. The

4 publication notice will comport with due process requirements and direct potential
5 class members to the Settlement Website at www.WENClassSettlement.com or
6 toll-free phone line where full information concerning the Settlement, as well as
7 Claim Forms and instructions, will be available.
8

Finally, the Court-approved Settlement website will: (1) provide full details

9 of the benefits available under the Settlement; (2) explain the rights of Class
10 Members to object to or opt-out of the Settlement, (3) clarify that no further notice
11 will be provided to them and that the Settlement has been preliminarily approved;
12 and, (4) inform Class Members that they should monitor the Settlement Website
13 for further developments and to obtain Claim Forms. The Long-Form Notice for
14 the Settlement Website is attached as Exhibit D to the Joint Declaration. The
15 Publication Notice is attached as Exhibit E to the Joint Declaration.
16

Accordingly, the proposed Notice Plan describes the proposed Settlement

17 and sets forth, among other things: (1) the nature, history and status of the
18 litigation; (2) the definition of the proposed Class and who is excluded from the
19 Class; (3) the reasons the parties have proposed the Settlement; (4) the amount of
20 the Settlement; (5) the Class’s claims and issues; (6) the parties’ disagreement over
21 damages and liability; (7) the plan for allocating the Settlement proceeds to the
22 Class through the two-tier claim process; (8) the maximum amount of attorneys’
23 fees and expenses that Class Counsel intends to seek; (9) the maximum amount of
24 Representative Plaintiffs’ request for incentive awards; and, (10) the date, time and
25 place of the final settlement hearing.
26

Further, the proposed Notice Plan discusses the rights Class Members have

27 in connection with the Settlement, including: (1) the right to request exclusion
28 from the Class and the manner for submitting a request for exclusion; (2) the right
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1 to object to the Settlement, or any aspect thereof, and the manner for filing and
2 serving an objection; and, (3) the right to participate in the Settlement and
3 instructions on how to complete and submit Tier 1 and Tier 2 Claim Forms. The
4 Notice Plan also provides contact information for Class Counsel and counsel for
5 the Defendants, as well as the postal address for the Court.
Rule 23(c)(2)(B) requires that notice of a settlement be “the best notice that

6

7 is practicable under the circumstances, including individual notice to all members
8 who can be identified through reasonable effort.” See also Rule 23(e)(1) (“The
9 court must direct notice in a reasonable manner to all class members who would be
10 bound by the propos[ed settlement].”). As detailed above, the Notice Program
11 proposed in connection with the Settlement more than satisfies the requirements of
12 the Federal Rules of Civil Procedure and due process. Moreover, courts routinely
13 find that comparable notice procedures meet the requirements of Rule 23 and due
14 process.

Accordingly, in granting preliminary approval of the Settlement,

15 Plaintiffs respectfully requests that the Court also approve the proposed form and
16 method of giving notice to the Class as set forth herein.7
17 VIII. THE PROPOSED CLAIMS PROCESS SHOULD BE APPROVED
18

Under the Settlement, the Parties have agreed to a two tier claim process.

19 First, Tier 1 Class-Wide Flat Rate Claims are class-wide flat rate claims for $25
20 each. Tier 1 is for Class Members that have experienced no adverse reaction to the
21 Products or have no documentation. Exhibit F to the Joint Declaration is a copy of
22 the Tier 1 Claim Form. The Tier 1 Claim Form is simple and requires no proof of
23 purchase.
24

Tier 2 Documented Adverse Reaction Claim Forms will be used for Class

25 Members that have documented adverse reactions to the product and will be
26 eligible to receive up to $20,000, as determined by a Court-appointed Special
27

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The Parties are gathering necessary data for solicitation of bids from potential
28 notice and claims administration providers. The Parties expect to provide an
update on this issue at or before the Preliminary Approval Hearing.
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1 Master.

A sample Tier 2 Claim Form is attached as Exhibit G to the Joint

2 Declaration. In order to make a claim under Tier 2, the Class Member must submit
3 a valid and complete Tier 2 Claim Form, along with Supporting Documentation as
4 described in Section 6.B.2 of the Settlement Agreement. Draft instructions for Tier
5 1 and Tier 2 Claim Forms are attached as Exhibit H to the Joint Declaration.
6

The Settlement Administrator and Special Master shall have authority to

7 determine the validity, or lack thereof, of any Tier 2 claims submitted, including
8 the sufficiency of the Class Member’s evidence of his or her claimed Injury and
9 any other documentation submitted in support of the claim. The Special Master
10 shall have full and final authority over any decision with respect to a Tier 2 claim
11 and that decision shall not be subject to an appeal or reconsideration.
12

The following forms of documents will be considered “Supporting

13 Documentation” and

shall be received by the Settlement Administrator and

14 reviewed by the Special Master in support of a Tier 2 claim: before or after
15 photographs (labeled or dated as such) depicting the Class Member’s claimed
16 injury, video testimony of the Class Member describing the claimed injury,
17 medical records from a licensed medical professional related to the Class
18 Member’s claimed injury, and/or supporting declarations from witnesses who
19 verify the Class Member’s claimed injury. Additionally, the following forms of
20 Supporting Documentation shall be received by the Settlement Administrator in
21 support of a claim for reimbursement of out-of-pocket expenses incurred to redress
22 injury purportedly caused by WEN Hair Care Products: dated medical bills
23 evidencing payments related to the Class Member’s claimed injury, dated receipts
24 for out-of-pocket expenses, dated credit card statements evidencing payment by the
25 Class Member related to the Class Member’s claimed injury, or dated bank
26 statements evidencing payment of out-of-pocket expenses related to the Class
27 Member’s claimed injury. Dated receipts and/or declarations supplied by, for
28 example, a medical provider or hairdresser confirming the amount spent to redress
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1 a claimed injury will also be considered. Recently, in Martin v. Reid, 818 F.3d
2 302, 309 (7th Cir. 2016), the Seventh Circuit approved of a very similar settlement
3 structure and specifically stated that the information required by the Special Master
4 was appropriate for hair loss claims.
5

The Supporting Documentation described above is not intended to provide

6 an exclusive list of the supporting evidence that may be submitted in support of a
7 Claim. The Settlement Administrator and Special Master have discretion to accept
8 forms of evidence in addition to or in place of the examples set forth above.
9 IX.

INCENTIVE AWARDS TO NAMED PLAINTIFFS AND

10

ATTORNEYS’ FEES AND COSTS

11

Class Counsel is entitled to compensation and reimbursement of expenses

12 for bringing the case and obtaining a fair, reasonable and adequate settlement.
13 Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 392 (1997) (attorneys’ fees are
14 recoverable where plaintiff has maintained a suit that confers a common benefit).
15 The Settlement Agreement provides that Defendants will not oppose Class
16 Counsel’s application for a fee and expense award in the amount of $6.5 million.
17 This amounts to less than 25% of the non-reversionary Fund established for the
18 payment of claims. The Settlement Agreement also provides that Class Counsel
19 will submit applications for, and Defendants will not oppose, incentive awards for
20 Plaintiffs Friedman and Miller of $25,000 each, an incentive award for Plaintiff
21 Henry-McArthur of $5,000, and Plaintiff Rogers of $2,500.
22

The proposed Named Plaintiffs’ Incentive Awards are also reasonable.

23 Courts recognize that a class representative is entitled to compensation for the
24 expense he or she incurred on behalf of the class lest individuals find insufficient
25 inducement to lend their names and services to the class action. In re Oracle Sec.
26 Litig., No. 90-0931, 1994 U.S. Dist. LEXIS 21593, 1994 WL 502054, at *1 (N.D.
27 Cal. June 18, 1994) (citing In re Continental Ill. Sec. Litig., 962 F.2d 566, 571 (7th
28 Cir. 1992)).

Such payments are routinely approved when, as here, they are
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1 reasonable in light of applicable circumstances, and not unfair to other class
2 members. Smith v. Tower Loan of Miss., Inc., 216 F.R.D. 338, 368 (S.D. Miss.
3 2003). To assess whether an incentive award is excessive, the Court must balance
4 the number of named plaintiffs receiving incentive payments, the proportion of the
5 payments relative to the settlement amount, and the size of each payment. Staton
6 v. Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003).
7

Here, the Named Plaintiffs provided meaningful representation to the class

8 by participating in all (or some) of the following litigation-related activities:
9 reviewing court filings, answering interrogatories, responding to document
10 requests, preparing for depositions with their attorneys, and sitting for depositions.
11 Jt. Decl., ¶ 3. Furthermore, Plaintiffs Friedman and Miller were subject to invasive
12 review of their medical records. Id. The proposed Named Plaintiffs’ Incentive
13 Awards are appropriate considering the time and effort involved in representing the
14 interests of the Class. Even the payments at the higher end of the spectrum for
15 Plaintiffs Friedman and Miller represent only modestly more than the individual
16 cap for Tier 2 claims. And, in the case of Plaintiffs Henry-McArthur and Rogers,
17 much less. As such, the proposed incentive awards are within a reasonable range.
18 X.

CONCLUSION

19

As the above analysis and supporting documents demonstrate, the proposed

20 Settlement clearly meets the standards for preliminary approval. Therefore,
21 Plaintiffs respectfully request that this Honorable Court enter an order (a)
22 certifying, for settlement purposes, the Class; (b) preliminarily approving the
23 proposed settlement described in the Settlement Agreement filed concurrently
24 herewith; (c) authorizing the form and method of class notice described herein and
25 filed concurrently herewith; (d) setting a date for the Final Approval Hearing to
26 consider final approval of the settlement; and (e) granting such other and additional
27 relief as the Court deems just and appropriate.
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1 DATED:
2

June 28, 2016

JOHNSON & JOHNSON
By:

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s/ Jordanna G. Thigpen
Neville L. Johnson (SBN 66329)
njohnson@jjllplaw.com
Douglas L. Johnson (SBN 209216)
djohnson@jjllplaw.com
Jordanna G. Thigpen (SBN 232642)
jthigpen@jjllplaw.com
439 North Canon Drive, Suite 200
Beverly Hills, California 90210
Telephone: (310) 975-1080
Facsimile: (310) 975-1095

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By:

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By:

CUNEO GILBERT & LADUCA, LLP
/s/ William H. Anderson
William H. Anderson (Pro Hac Vice)
wanderson@cuneolaw.com
Charles J. LaDuca (Pro Hac Vice)
charlesl@cuneolaw.com
Michael Flannery (SBN 196266)
mflannery@cuneolaw.com
507 C Street, NE
Washington, DC 20002
Telephone: (202) 789-3960
Fax: (202) 789-1813
VARNELL & WARWICK, P.A.
/s/ Brian W. Warwick
Brian W. Warwick (Pro Hac Vice)
bwarwick@varnellandwarwick.com
Janet R. Varnell (Pro Hac Vice)
jvarnell@varnellandwarwick.com
Steven T. Simmons (Pro Hac Vice)
ssimmons@varnellandwarwick.com
P.O. Box 1870
Lady Lake, FL 32158
Telephone: (352) 753-8600
Facsimile: (352) 753-8606

Counsel for Named Plaintiffs and the Proposed Class
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ATTESTATION RE: SIGNATURES
I, Jordanna G. Thigpen, am the ECF User who is filing Plaintiffs’

4 Memorandum of Law in Support of Preliminary Approval. I attest that all
5 other signatories listed, and on whose behalf the filings are being submitted,
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concur in the content of such filings and have authorized the filing of such
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8 documents.
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DATED: 6/28/16

JOHNSON & JOHNSON LLP

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/s/ Jordanna G. Thigpen
Neville L. Johnson (Bar No. 66329)
njohnson@jjllplaw.com
Douglas L. Johnson (Bar No. 209216)
djohnson@jjllplaw.com
Jordanna G. Thigpen (Bar No. 232642)
jthigpen@jjllplaw.com
JOHNSON & JOHNSON LLP
439 North Canon Drive, Suite 200
Beverly Hills, California 90210
Telephone: 310.975.1080
Facsimile: 310.975.1095

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MEMORANDUM OF LAW IN SUPPORT OF PRELIMINARY APPROVAL